Home lending numbers up despite pandemic

We might be living through a global pandemic, but that certainly hasn’t scared people away from the property market, with new figures showing that home loan commitments have been soaring.

Figures from the Australian Bureau of Statistics (ABS) shows the value of new home lending increased by 12.6 per cent in August, following an 8.8 per cent climb in July, based on seasonally adjusted figures.

ABS head of finance and wealth Amanda Seneviratne said: “The value of owner occupier home loan commitments was $16.3 billion in August, the highest value in the history of the series.”

A 13.6 per cent rise in the value of new owner-occupier mortgages was also the biggest month-on-month surge the bureau has seen, eclipsing the previous record of 10.7 per cent that was set in July.

First-home owners driving demand

While investors certainly aren’t out of the picture, a lot August’s housing demand came from owner-occupiers, in particular first-home buyers.

Housing finance commitments to investors was up by 9.3 per cent in August to $5 billion, however this was down 4.3 per cent year on year.

The number of owner-occupier first-home buyer loan commitments on the other hand rose by a whopping 17.7 per cent in August, reaching the highest level that has been seen since October 2009.

ABS figures also found that the value of new loan commitments to owner-occupiers for construction of new dwellings rose by 19.2 per cent, and new loan commitments to owner occupiers for land was also strong, having increased significantly over the last 3 months.

New loan commitments for owner-occupier housing rose in all states and territories, with the Northern Territory being the only exception.

The largest increases were seen in Victoria, Queensland and New South Wales.

Ms Seneviratne did note however that based on lender processing times, August’s home loan commitments likely reflect customer demand from June and early July, which was prior to Victoria imposing its stage three and four lockdown restrictions.

But with the amount of government stimulus around, including the First Home Loan Deposit Scheme, HomeBuilder and other first home owner concessions, it seems unlikely that property demand from first-home buyers is going to slow down much anytime soon.

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